Economic Delicts
Economic Delicts in Scottish law are defined in the cases of OBG Ltd and another v Allan and others (2007) and Commisioners for Customs and Excise v Total Network SL (2008) to fit one of the three following categories: *Inducement to breach a contract *Inflicting harm by unlawful means *Conspiracy Although these cover economic loss, the default position in Scottish law is that there is no actionable claim for any economic loss where the actions are performed in the manner of fair competition (Mogul Steamship v MacGregor, Gow & Co (1892)) Inducement to breach a contract For this action to be available, there must have been a contract between two parties (Global Resources Group Ltd v MacKay (2009)) , and the third party must have induced one of those parties to breach the contract, knowing that there was a contract there, and that they must have known the contract would have been breached as a result. This is illustrated in British Motor Trade Association v Grey (1951). Following World War 2 the sale of new cars was highly regulated, the result being that near-new cars had a higher sale price than new cars (allowing some enterprising buyers to "flip" their car for a quick profit). To discourage this practice, the British Motor Trade Association had its members insert a clause into sales contracts prohibiting resale for 6 months unless approved by the dealer. Grey purchased a car near-new and argued that his offer to purchase the car at a higher price than the dealer did not amount to inducement - the court was ultimately unswayed by this and ruled his offer at a higher price was inducting the original purchaser to break their contract. Merely offering an opportunity to breach a contract is not enough. In Calor Gas Ltd v Express Fuels (Scotland) Ltd (2008), customers of Calor Gas had an undertaking with Calor that only they could refuel their gas cylinders. Although Express fuels did offer to take and refill them, this was not found to be an inducement to breach contract as it only offered an opportunity for others to do so. The party inducing the breach also has to know about the contract. In Rossleigh Ltd v Leader Cars Ltd (1987) although Leader/Carlaw cars did induce a breach of the contract between Carlaw lambs and Rossleigh Ltd, as the directors did not know about the contract between Carlaw lambs and Rossleigh would be breached, they were not found liable for the breach. However, Global Resources Group Ltd v MacKay (2009) rules out wilful ignorance as a defence strategy, if the third party suspects a breach they are expected to discuss it with their potential partner. The breach of contract must either be the ends, or a required means to achieve the ends. It cannot be a simple side effect. Defences Justification is an available defence for inducement to breach a contract. In Brimelow v Casson, the head of the "Joint Protection Committee" who advocated for the interests of performers and musicians (Casson) was sued by the Brimelow Touring Theatre company after the Committee induced theatre venues to break its contract with the company citing the company's lower than standard wages payed to performers. This was held to be justified as lower wages tended to encourage the female performers into prostitution. Inflicting harm by unlawful means Inflicting harm by unlawful means is a form of vicarious liability. If A suffers a loss in a contact from B, and the cause of that loss is entity C, then A can jump over B and simply sue C direct. It is defined simply as Wrongful interfering actions which the claimants have an economic interest with intention to cause a loss. Conspiracy Delicts of Conspiracy are split into two groups, those that use unlawful means, and those that are based purely on lawful means; the implication of this split is that conduct that is otherwise lawful can open the conspirators to a liability. Lawful Act Conspiracy A Lawful act conspiracy occurs when a group engages in conduct designed to harm the economic interests of another, but if the behaviour was done individually would not actually be illegal. An example of this in action, as well as a defence, is in Scala Ballroom (Wolverhampton) Ltd v Ratcliffe (1958). The Musicians Union arranged a boycott of Scala Ballrooms in response to it refusing to admit black patrons into its premises. Although the court did describe this as a conspiracy of the musicians, having come to an agreement to do economic harm to Scalia. A musician refusing to play is quite acceptable (in law at least where there is no contract), but a group agreeing to do harm However, as the purpose was to improve the lot of its members (particularly the non white members), this was held not to be unlawful. Unlawful Act Conspiracy This is perhaps best demonstrated in cases of "Carousel Fraud" such as Commissioners of Customs & Excise v Total Network SL (2008) where a number of legal entities will seemingly transfer Taxable items between each other to hide payable VAT and collect reclaimable taxes from HM Customs and Excise. There is both a conspiracy between the groups, and unlawful behaviour in taxation fraud. Category:Intentional Delicts Category:Contract